ALASKA WORKERS' COMPENSATION BOARD
ALASKA WORKERS' COMPENSATION BOARD
P.O. Box 115512
Juneau, Alaska 99811-5512
| |) | |
|GAYLE M. CUMMINGS, |) | |
| |) | |
|Employee, |) |INTERLOCUTORY DECISION AND ORDER |
|Respondent. |) | |
| |) |AWCB Case No. 200612715 |
|v. |) | |
| |) |AWCB Decision No. 10-0139 |
|ASRC ENERGY SERVICES INC, |) | |
|Employer, |) |Filed with AWCB Fairbanks, Alaska |
| |) |on August 16, 2010 |
|and |) | |
| |) | |
|ARCTIC SLOPE REGIONAL CORP, |) | |
|Insurer, |) | |
|Petitioners. |) | |
| |) | |
| |) | |
| |) | |
| |) | |
ASRC’s (Employer) Petition for a finding of fraud based on AS 23.30.250(b) was heard on June 17, 2010, in Fairbanks, Alaska. Attorney Robert Bredesen represented Employer and its insurer. Attorney Michael Wenstrup represented Gayle M. Cummings (Employee). Employee testified on her own behalf. Rehabilitation specialist Dan LaBrosse, claims adjuster Lynn Palazzotto, rehabilitation specialist Carol Jacobsen, investigator Dennis Johnson, and Patrick Radecki, M.D. testified on behalf of Employer. The parties agreed to submit their closing arguments in written form by July 1, 2010. The record closed on July 15, 2010, when the board next met.
ISSUES
Employer alleges Employee knowingly made false or misleading statements or representations for purposes of obtaining benefits. Specifically, Employer contends: 1) Employee misrepresented her symptoms to her medical providers; 2) Employee misrepresented to Employer she was not working while collecting temporary total disability (TTD) benefits; and 3) Employee failed to disclose to the rehabilitation specialist she was working during the course of her eligibility evaluation and rehabilitation plan.
Employee contends she did not exaggerate her symptoms to her medical providers, that her failure to disclose her volunteer work at an herbal store did not constitute a fraudulent representation upon which Employer relied in providing TTD benefits, and that she did not know she was required to notify the rehabilitation specialist of her work activities.
1) Did Employee fraudulently obtain benefits as defined under AS 23.30.250(b)?
2) Is Employer entitled to reimbursement of benefits under AS 23.30.250(b)?
FINDINGS OF FACT
1. In 1998, Employee began working as a cook and baker for Employer. At the time of her injury she worked a twelve-hour shift at Clear, Alaska, three days on and three days off, and then four days on and four days off the following week. She was earning approximately $100,000 per year, and planned to retire in about five years.[1]
2. On August 10, 2006, Employee was beginning her 4:00 am to 4:00 pm shift when she lifted a grill cover that weighed approximately twenty pounds and felt a pull and twist in her neck.[2]
3. Employee continued preparing breakfast and about two hours later picked up the grill cover to place it on top of the grill when she felt “extreme sharp, burning pain” in her neck. She informed her supervisor she needed to see Employer’s medic because she had injured her neck. At her supervisor’s request, Employee completed her shift.[3]
4. The day after the initial injury, Employee felt pain in her neck, right shoulder, right arm, back, and right leg. She nevertheless began her work shift, and again removed the grill cover from the grill. At that time, she felt an “excruciating pain up the back of [her] head” and under her right scapula. She informed her supervisor she could not complete her shift. At his request, she finished the breakfast service and closed the kitchen at about 8:00 am.[4]
5. On August 12, 2006, Employee saw Employer’s medic, Physician’s Assistant Jim Siddall.[5] P.A. Siddall noted Employee was experiencing right hip, neck and shoulder pain. He excused her from work due to her injury and prescribed pain medication.[6]
6. On August 15, 2006, Employee first sought treatment from Chris Mannino, D.C. She saw Dr. Mannino for several follow-up appointments throughout August and September. On August 28, 2006, Dr. Mannino noted the pain was on the right side of the neck and shoulder, and the back and hip pain had resolved. Neck range of motion tests revealed 40 degrees flexion, 60 degrees extension, 30 degrees left lateral flexion, 20 degrees right lateral flexion, left rotation 45 degrees, and right rotation 45 degrees. Dr. Mannino noted Employee had decreased range of motion due to pain, muscle spasms, and multiple subluxations.[7]
7. On September 12, 2006, Employee sought treatment from Physician’s Assistant Paul Finch at Tanana Valley Clinic in Fairbanks. P.A. Finch noted Employee had no cervical or thoracic spine tenderness and had normal mobility and curvature. She had tenderness in her right shoulder and pain with motion. X-rays taken that day of the cervical spine revealed normal development, with minimal spurring of the disc spaces at C5-6 and C6-7. Tyler Gill, M.D., who read the X-rays, diagnosed degenerative disc disease of C5-6 and C6-7, with minor osteoarthritic spurring.[8] P.A. Finch diagnosed cervicalgia with radiculopathy, and prescribed narcotic medication for pain. He also referred Employee for magnetic resonance imaging (MRI) and recommended she follow-up with the Family Practice Clinic at Tanana Valley Clinic.[9]
8. Employer accepted liability for Employee’s injury, and began paying TTD benefits to Employee.[10] On the back of each TTD payment check was the following language, directly below the signature line: “I certify, as attested by my signature, that I have not worked in any employment or self-employment, GAINFUL OR OTHERWISE DURING THE PERIOD OF DISABILITY COVERED BY THIS CHECK.”[11] Employee received regular TTD payments, which she signed for and deposited, until Employer controverted all benefits on July 23, 2008.[12] Employee testified at hearing she was aware of the language on the back of her TTD payments.[13]
9. Shortly after her injury, Employee advertised and sold several personal items on eBay. As she testified at hearing, she had sold items on eBay in the past, and aimed to supplement her income by selling artwork and other personal items once she was no longer working due to her injury.[14]
10. On September 13, 2006, Employee underwent a cervical spine MRI, which revealed multilevel degenerative spondyloarthropathy.[15]
11. On October 17, 2006 Employee sought treatment from George Allen, D.C., who noted Employee was unable to work because of chronic pain syndrome due to trauma.[16] Dr. Allen recommended physical therapy, neuromuscular reeducation, spinal manipulation, and electrical stimulation.[17]
12. On November 6, 2006, Employee obtained a business license from the Alaska Division of Corporations, Business, and Professional licensing. The business license listed Employee as a sole proprietor of Alaska Herb USA. The license expired December 31, 2006.[18]
13. On January 4, 2007, Employee underwent an employer’s medical examination (EME) by Barry Matthisen, D.C. Dr. Matthisen conducted range of motion testing which reviewed 45 degrees flexion with mild/moderate increase in right cervical pain, 30 degrees extension with mild/moderate increase in right cervical pain, 20 degrees right flexion with a moderate increase in right cervical pain, 25 degrees left flexion with mild right cervical pain, and 50 degrees right and left rotation with a mild increase in right cervical pain. Dr. Matthisen performed a Spurling’s maneuver test, which elicited moderate to severe right cervical pain radiating into the right scapular area. He diagnosed persistent, right cervical sprain/strain with right facet joint injury causing referred right cervical pain and spasms and radiating right scapular pain, related to the August 11, 2006 work injury, which was complicated by a pre-existing degenerative condition. He stated Employee did not have true radiculitis. He stated the treatment to date had been reasonable and necessary and she was not yet medically stable. He felt her complaints were genuine and saw no yearning for secondary gain. He believed she had the desire to improve and resume working.[19]
14. On February 14, 2007, Employee sought treatment from Marc Slonimski, M.D., of Advanced Pain Centers of Alaska. Dr. Slonimski diagnosed cervical spondylosis and recommended cervical facet injections.[20]
15. On March 13, 2007, Janice Onorato, M.D., of Fairbanks Psychiatric and Neurological Clinic evaluated Employee. Dr. Onorato noted decreased range of motion in the neck in all planes and right scapular winging. Dr. Onorato was unable to determine the cause of the scapular winging, but strongly suspected entrapment of the dorsal scapular nerve. She opined it was possible Employee had a stretch injury of the C-5 root. She recommended a follow-up MRI of the cervical spine at an imaging center with a stronger magnet than Tanana Valley Clinic and stated Employee may benefit from physical therapy and a referral to an orthopedic surgeon specializing in shoulder surgery.[21]
16. On March 26, 2007, Robert Dingeman, M.D., examined Employee and noted she had pain in her right shoulder and decreased range of motion. He diagnosed right shoulder rotator cuff disease, cervical spondylosis and diskogenic disease and ordered new x-rays and a shoulder MRI.[22]
17. On April 2, 2007, Employee underwent an MRI of her neck and right shoulder at Fairbanks Memorial Hospital. The MRI showed mild to moderate central stenosis of C5, C6, and C7 and hypertrophic changes of the AC joint associated with edema, suggestive of impingement, and moderate to severe tendinosis, but no tear.[23]
18. On April 9, 2007, Employee underwent x-rays of her neck and right shoulder, which showed spondylosis at the C5-C6 and C6-C7 levels and mild hypertrophic changes in the AC joint, but no other bone or joint abnormality.[24]
19. On April 10, 2007, Dr. Dingeman diagnosed right shoulder tendinitis and acromioclavicular arthritis and recommended steroid injections.[25]
20. On April 23, 2007, Dr. Dingeman performed a steroid injection and noted Employee was able to tolerate 140 degrees of forward flexion and 90 degrees of abduction, but unable to tolerate 70 degrees of internal and external rotation. He diagnosed right shoulder acromioclavicular syndrome with bursitis.[26]
21. On May 15, 2007, Dr. Dingeman noted minimal sustained improvement from the injection he performed at the previous visit, although there had been marked improvement immediately following the injection. Employee could tolerate no more than 60 degrees of forward flexion and 30 degrees of abduction.[27]
22. In May 2007, Employee began physical therapy and ultrasound treatments, at the recommendation of Dr. Dingeman. On May 23, 2007, physical therapist Gregory Milles noted Employee had 75% of cervical flexion and extension, 50% lateral flexion, 50% cervical rotation to the left and 75% cervical rotation to the right.
23. On July 16, 2007, Dr. Allen wrote a letter to Employer recommending Employee receive a “disability” rating with Richard Cobden, M.D. He stated Employee’s condition was exacerbated by simple low stress movement and Employee experienced “consistent burning pain” rated at a “9 in the evening and upon waking in the morning,” and lowering to a 7 if she has minimal activity throughout the day. Dr. Allen stated Employee was unable to do minimal household tasks, including laundry, lifting a coffee pot, and cleaning the bathtub, due to her pain level. Dr. Allen described Employee as an “atypical patient due to the nature of her injury, the limitations of therapies, and lack of satisfactory response to various physical medicine therapies.”[28]
24. On July 24, 2007, Dr. Dingeman recommended retraining, as even if Employee were to undergo a successful rotator cuff decompression surgery, “her ability to do repetitive activity with her arm out in front or heavy or repetitive overhead activity is likely to be symptomatic and career limiting.”[29]
25. On July 26, 2007, Dr. Cobden evaluated Employee and noted her range of motion in both shoulders was close to normal except for lack of abduction on the right of 30 or 40 degrees. Range of motion in her neck was limited to 20 degrees in any direction, which Dr. Cobden stated was consistent with her injury. He opined she had five percent whole person impairment due to radiculopathy, cervical degeneration and post traumatic stiffness and loss of grip strength. He further opined her rehabilitation program was appropriate.[30]
26. In August 2007, adjuster Lynn Palazzotto hired a private investigator to conduct video surveillance of Employee. Ms. Palazzotto testified at hearing she hired an investigator because she questioned the validity of Employee’s injury and she “couldn’t figure out why [Employee] was getting worse.” She testified she “had no idea” Employee was working until the investigator discovered it.[31]
27. On August 30, 2007, Employee submitted a request for a reemployment benefits eligibility evaluation.[32]
28. On October 10, 2007, Workers’ Compensation Technician Fannie Stoll directed Compensation Risk Consultants (CRC) to complete an eligibility evaluation for Employee.[33]
29. On October 18, 2007, Employee had a follow-up appointment with Dr. Dingeman, who noted Employee reported “great resolution in the prior discomfort crunchiness and pain in her right shoulder and trapezial area.” He further stated, “I think it is great that she has moved on to evaluation for retraining. Her moving forward to be retrained and reeducated is of some significant and pragmatic value.”[34]
30. On October 27, 2007, Roger Kempfer of CRC submitted an eligibility evaluation report, recommending Employee be found eligible for reemployment benefits.[35] On November 16, 2007, reemployment benefits administrator (RBA) designee Faith White found Employee eligible for reemployment benefits, based on Mr. Kempfer’s recommendation.[36]
31. On November 12, 2007, Employee’s boyfriend Larry Schander obtained a business license from the Alaska Division of Corporations, Business, and Professional Licensing. The business license listed Mr. Schander as the sole proprietor of Alaska Herb USA.[37] Mr. Schander rented a space in the Regency Mall in Fairbanks in November 2007, and Alaska Herb USA opened in December 2007.
32. In December 2007, Employee began regularly volunteering at Alaska Herb USA. She usually opened the store in the morning, sold herbal products, and researched and answered customers’ questions. Employee was never paid for her work at Alaska Herb USA.[38]
33. On December 28, 2007, Dan LaBrosse of CRC submitted a vocational evaluation and reemployment benefits plan for Employee.[39] The reemployment benefits plan stated specific training required for Employee to become employable as a Food Services Manager. Specifically, Employee planned to obtain an associate degree in applied business from the University of Alaska Fairbanks, with a plan to begin attending classes in January 2008.[40]
34. On January 10, 2008, Dr. Allen completed a job analysis questionnaire, and found Employee unable to complete all the necessary tasks for the position of food service manager.[41]
35. On January 31, 2008, Dr. Allen opined Employee was unable to attend classes due to “moderate exacerbation” of her work injury, which occurred “while attending school.” He anticipated she would be able to attend classes in 2-3 months.[42]
36. On January 31, 2008, Dan LaBrosse issued a reemployment benefits plan status report, showing Employee had withdrawn from all classes for the spring 2008 semester, due to “physical complaints supported by her physician Dr. Allen.” Mr. LaBrosse requested a medical suspension of the reemployment plan to allow Employee time to “stabilize medically and for CRC to explore other vocational training objectives that would be within the claimant predicted physical capacities.”[43] On February 11, 2008, the RBA granted Mr. LaBrosse’s request for a medical suspension of the plan.[44]
37. On February 26, 2008, Dr. Matthisen performed a follow-up examination of Employee. Cervical range of motion was 45 degrees flexion, 30 degrees extension with mild/moderate right side cervical pain, 25 degrees right and left flexion with mild right cervical pain, and 50 degrees right and 60 degrees left rotation with mild right cervical pain. Dr. Matthisen noted this range of motion was the same as in his previous evaluation, roughly a year prior, except Employee had 5 degrees more right flexion than before. Dr. Matthisen reiterated his initial diagnosis of chronic facet joint syndrome/mechanical joint dysfunction; degenerative changes at C4-7, aggravated by the work injury, and chronic right AC degenerative changes aggravated by the work injury. He stated he did not believe Employee had secondary gain issues or was symptom magnifying. Finally, he stated she would be able to do only very light lifting (no more than 5-10 pounds), and no prolonged sitting, standing, or stooping that could aggravate her cervical facets/possible instability. Based on those limitations, Dr. Matthisen stated Employee was not able to do any of the proposed job descriptions, but he expected Employee’s condition to improve.[45]
38. On March 10, 2008, Dr. Matthisen wrote to Lynn Palazzotto, claims adjuster for Employer, stating he reviewed surveillance footage of Employee at Ms. Palazzotto’s request. He stated Employee could likely sit through classes, but prolonged sitting might be bothersome. He further stated he believed her actions on the surveillance footage were “pretty consistent with her complaints.” He specifically noted an incident in which Employee balances herself on an icy patch and uses only her left arm to open the door and brace herself, keeping her right arm against her abdomen. He stated he would normally expect a person to use both arms to brace for stability. He further stated “she does use her right arm quite a bit but nothing too strenuous.”[46]
39. On March 12, 2008, in response to Lynn Palazzotto’s request for clarification, Dr. Matthisen opined Employee was physically capable of participating in the vocational rehabilitation plan training her to become a food service manager.[47]
40. On March 17, 2008, Dr. Allen authored a second letter stating Employee was unable to attend classes due to a “moderate exacerbation of her original condition.” He anticipated her ability to return to classes in 2-3 months.[48]
41. On March 18, 2008, Dr. Matthisen clarified his opinion and said only with the proper therapy would Employee’s condition improve sufficiently to allow her to perform the tasks required for the position of food service manager.[49]
42. On March 27, 2008, Mr. LaBrosse issued a reemployment benefits plan status report, stating both Dr. Allen and Dr. Matthisen disapproved the plan due Employee’s inabilities to withstand the physical demands of the vocational objective. He further stated CRC needed additional information on the predicted physical functioning capacities in order to develop a vocational plan.[50]
43. On May 28, 2008, Employee underwent a physical capacity evaluation (PCE) completed by Farooz Sakata. Ms. Sakata reported Employee “was not cooperative and had to be constantly persuaded to continue with the testing. Her behavior was extremely theatrical and histrionic and at best her efforts were consistently submaximal. She was extremely self limiting and reluctant to exert effort.” Ms.Sakata explained that self-limiting participation may be due to several different factors, including pain, fear of pain, fear of injury or re-injury, depression, anxiety and lack of familiarity with a safe physical maximum, and lack of motivation due to possible secondary gain. Ms. Sakata did not speculate as to the cause of Employee’s self-limiting behavior, though she reported Employee’s stated reason was pain, fear of injury and lack of familiarity with a safe level of maximum exertion.[51]
44. On May 29, 2008, Employee underwent a digital motion x-ray of the cervical spine, conducted by Dr. Matthisen. The x-ray revealed straightening of cervical lordosis, C1-2 bilateral spinous accessory ligamentous instability, more prominent on the right, and C4-5 posterior longitudinal ligamentous instability and right capsular ligamentous instability.[52]
45. On July 1, 2008, Mr. LaBrosse issued a reemployment benefits plan status report, stating the current vocational objective was still food service manager, and the physical capacities evaluation demonstrated Employee’s ability to perform sedentary and light level of work required by the food service manager position. Mr. LaBrosse met with Employee on July 1, 2008; Employee stated she had been mistreated and reinjured at the PCE. She further stated she was not then enrolled at the University of Alaska, but was taking online courses with the Global Institute of Natural Medicine to become a holistic health practitioner. She stated she was not employed at that time.[53]
46. On July 9, 2008, Patrick Radecki, M.D., performed a records review at Employer’s request. In addition to the available medical records, Dr. Radecki reviewed surveillance video footage taken in early August 2007 and June 2008. Dr. Radecki stated:
[Employee] has no evidence of a disability on these examinations and there really is no evidence that she needs a vocational rehabilitation plan or program since in these videos she seems to have perfectly normal physical capacities for a young woman. A retraining program seems to be unnecessary, but what I can additional say is that Ms. Cummings is certainly capable of food service manager work as she would also be physically capable of performing practically any other work a young lady her age should be capable of. There is simply nothing objective in her medical record, abnormal in nature, that is in any way verified by her physical capacity test or by the videos as being a disability. Thus, there is no verifiable disability of any sort.[54]
47. On July 21, 2008, Employer filed a Petition for a finding of fraud under AS 23.30.250(a) and (b), alleging Employee knowingly made false and misleading statements for the purpose of obtaining workers’ compensation benefits. Specifically, Employer stated Employee had been working while claiming time loss benefits and had represented to Employer and rehabilitation specialist she was not able to work during a time period when she was working for another company. Relying on Dr. Radecki’s EME report, Employer further alleged Employee had misrepresented her condition and her physical capabilities to several medical providers.[55]
48. On August 6, 2008, Employee, appearing pro se, filed an opposition to Employer’s fraud petition. Employee stated she was not employed by any company and had never lied about her work related injury.[56]
49. On August 6, 2008, Dr. Cobden noted an x-ray taken that day showed narrowing at C4-5 and C5-6 with some degree of disk disease at C6-7. He further stated cervical flexion and extension were 60% - 70% of normal.[57]
50. On August 25, 2008, the board designee held a prehearing conference. Employee orally made a claim for TTD benefits, permanent partial impairment (PPI) rating in excess of five percent, medical benefits, transportation costs, reemployment befits, attorney fees and costs, and penalties and interest.[58]
51. On September 3, 2008, Employer filed an answer to Employee’s oral claim and a controversion notice, denying all benefits other than the five percent PPI rating already paid. In addition to several affirmative defenses, Employer stated Employee had knowingly misrepresented her condition to several doctors and falsely stated she was unable to work when she was in fact working.[59]
52. On September 9, 2008, Employer took Employee’s deposition. When asked if she had ever held a business license for Alaska Herb, Employee replied, “I applied for a business license and then I said I can’t apply for a business license. . . . Because I can’t have a business. . . . Because I’m on Workman’s Comp and I can’t have a business.”[60] At hearing, Employee clarified she meant she couldn’t have a business because she was receiving worker’s compensation benefits, which were substantially less than her prior earnings, and she couldn’t afford to have a business.[61]
53. On February 9, 2009, Employer took Employee’s boyfriend Larry Schander’s deposition. When asked how he came to open the herb store, Mr. Schander stated:
Well, we sat and talked about the -- I said [Employee] had to get -- do something to get out of the house. And I says, well, I might retire here in a year or two. And I says, maybe we can put something together. And I had to get her out of the house before she committed suicide. She was about ready to go goofy.[62]
54. On February 9, 2009, Employer took Dr. Allen’s deposition. Concerning Employee’s report of her pain symptoms, Dr. Allen stated:
During the physical examination, when she comes in and says, okay, I did this, or this procedure was done to me, basically I go back and do my physical examination. And she’s very specific when she says what hurts, where it hurts. And then there’s also the physical symptoms there, the actual spasms, the -- the point tenderness, things that I normally look for. If she was inconsistent, like she said, oh, it hurts here, then it hurts here, and then the next time she exacerbates it, all of a sudden it hurts over here and into a different region, then we’re talking about a different thing. But if she can put her finger on it and says this spot, then you could just make an X, and every time she can come back to that at every exacerbation, that would be a pretty tricky person who can -- who can -- who can do that without -- without making mistakes.[63]
Dr. Allen stated he generally believes his patients “about 60/40” because “you never know what their motivations are.”[64] He maintained throughout his deposition he believed Employee’s subjective reports of pain symptoms.[65] He stated Employee completing the tasks required at the herb shop were not inconsistent with his understanding of her condition because “if she’s not doing anything to aggravate her condition, if she can totally control her environment, then she’s experiencing just as much pain sitting at home as she would anywhere else.” He further stated working at the herb store, if truly sedentary, was within Employee’s abilities, and not inconsistent with her reported symptoms. “If she’s just sitting down here in a chair and -- and, you know, Googling, you know, some weird herb site, that has nothing to do with her neck.”[66] Counsel for Employer and Dr. Allen had the following exchange about halfway through the deposition:
Q. And if you were to learn that she worked every single day, other than Sundays after that eight hours a day at her store, while she was telling you she was in excruciating pain, would that not suggest she was perhaps more functional than she was telling you? Just perhaps.
A. I -- I would have to go along with that line, yeah.
Q. Okay.
A. Perhaps. I mean, like I said, I -- I wish I could go down to the store and see exactly what she does, and then I could give you specific, you know, stuff. I just don’t know what she does. But you’re right, perhaps, you know, she exaggerates a bit in that particular instance, but. . . .
Q. How. . . .
A. . . . she’s pretty consistent when she does have an exaggeration.[67]
Dr. Allen reported Employee would undergo treatment and improve, then re-injure herself or overexert herself which resulted in an exacerbation of the initial injury. He acknowledged Employee was not a typical patient, and her symptoms did continue longer in severity and duration
than he would have expected, but he did not disbelieve her.[68]
55. On March 11, 2009, Mr. LaBrosse issued a reemployment benefits plan status report, recommending the case be closed. Specifically, Mr. LaBrosse noted his receipt of a controversion notice from Employer stating Employee was in violation of the reemployment process and outlining the basis for the fraud petition filed July 21, 2008. Mr. LaBrosse stated Employee’s request to keep the file open because she was intending to defend herself against the fraud petition. He noted he contacted Employee by phone on March 9, 2009, left a message, and had not received a return call. Mr. LaBrosse stated “claimant is reportedly working at a store that was purchased by her boyfriend. Her adjuster states that she is no longer in need of vocational rehabilitation services therefore CRC is proposing to close this case on the request of the adjuster, Lynn Palazzotto.” Mr. LaBrosse stated he would consider the case close until otherwise directed.[69]
56. On April 4, 2009, Dr. Radecki performed a second records review at Employer’s request. Dr. Radecki reviewed additional video surveillance footage, which, in his opinion, revealed:
[N]o real hesitation relative to her chin movements, which would obviously correlate to her neck. She turns her chin to the right and left, requiring rotation of the neck structures to the right and left. She can be seen to look up slightly and to look down to the ground at times. She does not avoid prolonged standing to one’s right or left or walking to one’s right or left. At no time, therefore does Ms. Cummings demonstrate a behavior that suggests she has any sort of neck pain. Additionally, never once does she rub her neck as if it might be sore despite a lot of video reviewed.[70]
57. On February 9, 2010, the parties attended a prehearing conference to schedule the hearing on Employer’s petition. Employer clarified it was not pursuing a criminal fraud finding under AS
23.30.250(a), but only a reimbursement order under AS 23.30.250(b).[71]
58. At the June 17, 2010, hearing, Mr. LaBrosse testified he and Employee discussed her plans to eventually open an herb store, but she did not disclose any current activity with the herb store during the course of her eligibility evaluation. He testified Employee did not disclose her activities selling items on eBay during the course of her evaluation, but conceded such disclosure would be unnecessary if the activity was occasional and an employee was selling only personal items. He stated in his experience it is common for employees to sell their personal property after becoming injured to make up for lost income. He further testified Employee decided sitting in class was too uncomfortable and Employee stated she was unable to ride the shuttle bus from the university parking lot to the building where her classes were held. Mr. LaBrosse himself rode the shuttle bus to determine how uncomfortable it was, and he testified it was not too jarring and “seemed fine.” He stated no other employee he had worked with had ever complained about the shuttle bus. On cross-examination, Mr. LaBrosse stated he had no specific medical training and Employee was granted a medical suspension of her rehabilitation plan based on the recommendation of her treating physician.[72]
59. At hearing, Employer presented video surveillance footage of Employee picking weeds on August 3, 2007. The footage showed Employee repeatedly using her right arm and shoulder in a forward and side-to-side motion.[73] When asked at hearing about the video surveillance taken of Employee in the fall of 2007, Employee noted she had not viewed the video tapes, but was aware of their contents. She testified many of the activities she was seen doing in the surveillance tapes did cause her pain, but they had been approved by Dr. Allen on an as-tolerated basis.[74]
60. Dr. Radecki testified at hearing the medical records demonstrated Employee’s pain complaints were not consistent. Specifically, he stated range of motion tests conducted by Dr. Dingeman in March 20, and Dr. Cobden in July 2007, were inconsistent. He further testified Dr. Onorato’s diagnosis of scapular winging was inconsistent with Dr. Cobden’s examination, which revealed no scapular winging. Further, Dr. Dingeman’s diagnosis of right shoulder rotator cuff disease, which had not been mentioned by Dr. Allen, was effectively arthritis, which was a chronic process, and not consistent with an acute injury. He specifically noted Dr. Allen never formed an actual diagnosis, other than shoulder and neck pain, which is based purely on Employee’s subjective complaints, and thus not reliable. He testified the surveillance video did not show Employee exhibiting any pain behavior and demonstrated normal range of motion.[75]
61. Employee testified at hearing she began volunteering at Alaska Herb USA when it first opened in December 2007. She did not feel it would interfere with her studies at UAF and felt she could study while sitting at the store when it was slow. She was never paid for her work at Alaska Herb USA and considered herself a volunteer only. She testified there was “never any question” of being paid. Employee maintained all the day-to-day operations of the store, opening and closing each day, and did the bookkeeping work. She testified she considered it a hobby only, and she and Larry Schander decided to open the store as a way “to get [her] out of the house” because she was depressed about her injury. The store “gave [her] self-worth . . . [and] Larry was happy that [she] was happy.” The store has not been profitable, but is beneficial to Mr. Schander because he claims the loss for tax purposes. The business is on a month-to-month lease, and all profits are reinvested into the store. Employee testified “Larry could be fine no matter what. If it makes money, good, but if not, he just writes it off.”[76] The Board finds this testimony credible.
62. Employer called rehabilitation specialist Carol Jacobsen to testify at hearing; she would select job descriptions[77] to correlate to the skills required by Employee’s work in retail sales selling herbs at Alaska Herb USA. Jacobson further testified Employee’s subjective view her work at the herb store was a hobby, rather than employment, is not relevant for determining whether job skills acquired are included in a job analysis. On cross-examination, Ms. Jacobsen testified some employees are unaware volunteer work is relevant information to disclose in the rehabilitation process, and some employees intentionally withhold the information.[78]
63. Counsel for Employer clarified at hearing Employer is only seeking reimbursement for TTD benefits paid from December 15, 2007, through the termination compensation report, dated July 23, 2008. He further stated Employer is waiving its claim for attorney’s fees and costs related to pursuing the fraud petition, though he would reinstate the attorney’s fee claim if Employee filed a claim for benefits.
64. Nothing in the surveillance tapes demonstrated by a preponderance of evidence Employee was exaggerating her symptoms or attempting to mislead her physicians as to her physical capabilities. The opinions and records of Employee’s condition by her treating physicians are credible.
65. Because Employee did not believe her volunteer activities at the herb store constituted employment, she did not make a false statement when signing her TTD checks.
66. Employee’s failure to disclose either her eBay sales or the work at Alaska Herb USA does not constitute a knowing false representation for purposes of AS 23.30.250(b).
PRINCIPLES OF LAW
Sec. 23.30.122. Credibility of witnesses. The board has the sole power to determine the credibility of a witness. A finding by the board concerning the weight to be accorded a witness's testimony, including medical testimony and reports, is conclusive even if the evidence is conflicting or susceptible to contrary conclusions.
Sec. 23.30.250. Penalties for fraudulent or misleading acts; damages in civil action. . . .
(a) A person who (1) knowingly makes a false or misleading statement, representation, or submission related to a benefit under this chapter; (2) knowingly assists, abets, solicits, or conspires in making a false or misleading submission affecting the payment, coverage, or other benefit under this chapter; (3) knowingly misclassifies employees or engages in deceptive leasing practices for the purpose of evading full payment of workers' compensation insurance premiums; or (4) employs or contracts with a person or firm to coerce or encourage an individual to file a fraudulent compensation claim is civilly liable to a person adversely affected by the conduct, is guilty of theft by deception as defined in AS 11.46.180, and may be punished as provided by AS 11.46.120 - 11.46.150.
(b) If the board, after a hearing, finds that a person has obtained compensation, medical treatment, or another benefit provided under this chapter, or that a provider has received a payment, by knowingly making a false or misleading statement or representation for the purpose of obtaining that benefit, the board shall order that person to make full reimbursement of the cost of all benefits obtained. Upon entry of an order authorized under this subsection, the board shall also order that person to pay all reasonable costs and attorney fees incurred by the employer and the employer's carrier in obtaining an order under this section and in defending any claim made for benefits under this chapter. If a person fails to comply with an order of the board requiring reimbursement of compensation and payment of costs and attorney fees, the employer may declare the person in default and proceed to collect any sum due as provided under AS 23.30.170(b) and (c).
In Unocal v. DeNuptiis, the Alaska Supreme Court affirmed the Superior Court’s holding that the appropriate standard of proof required to bar an employee’s claim under AS 23.30.250 and to order forfeiture of benefits is the “preponderance of the evidence” standard.[79] In Municipality of Anchorage v. Devon, the Alaska Supreme Court adopted the board’s test for fraud claims under AS 23.30.250(b). To prevail on a fraud claim under this section, an employer must show “that (1) the employee made statements or representations; (2) the statements were false or misleading; (3) the statements were made knowingly; and (4) the statements resulted in the employee obtaining benefits.”[80]
In Shehata v. Salvation Army, the Alaska Supreme Court held employers are not required to prove all elements of fraud in pursuing a reimbursement order under AS 23.30.250(b).[81] It did, however, hold an employer must demonstrate a “causal link between a false statement or representation and benefits obtained by the employee.” Specifically, the false statement must be a causal factor in the employer’s payment of benefits.[82] In Shehata, the court held because the employer’s adjuster knew Shehata was working when he made the false statement he was not, the employer could not have justifiably relied upon the false statement and was therefore not entitled to a reimbursement order.[83] The Shehata court further held, under AS 23.30.250(b), an employee does not have an affirmative duty to tell an employer he is working, “such that a failure to disclose his work status would be a false representation for purposes of subsection .250(b).”[84] In other words, an employer cannot use an employee’s failure to disclose work status as a “false statement or representation” as required under Devon.
ANALYSIS
Dr. Allen stated repeatedly at his deposition that he believed Employee’s reports of the location and severity of her pain symptoms. EME Dr. Matthisen stated he did not believe Employee was symptom magnifying. While the physical therapist who performed the PCE believed Employee was not performing to her full capacity, she stated possible several reasons other than motivation for secondary gain that an employee may exhibit self-limiting behavior, including pain, fear of pain, fear of injury or re-injury, depression, anxiety and lack of familiarity with a safe physical maximum. None of these possible explanations give rise to a finding of fraud. Employee herself admitted at the PCE that she was self-limiting out of fear of pain, fear of re-injury, and lack of familiarity with her safe physical maximum. The only medical professional who has suspected malingering or symptom exaggeration is Employer’s physician, Dr. Radecki. Dr. Radecki never evaluated Employee in person, and based his opinion solely on the medical records and surveillance tape. The Board gives little weight to the opinion of Dr. Radecki. The surveillance video Employer chose to show at hearing, presumably its best video evidence that Employee was exaggerating her disability, showed Employee picking weeds, using a repetitive motion with her arm and shoulder. Employee herself reported that some of the activities she was seen doing in the surveillance video caused her pain, and the Board saw nothing in the surveillance tapes that demonstrated by a preponderance of evidence that Employee was exaggerating her symptoms or attempting to mislead her physicians as to her physical capabilities. The Board finds the opinions and records of the employee’s condition by her treating physicians are credible. Employer has not proved its allegation that Employee misrepresented her symptoms in order to receive benefits.
Employee admitted at hearing she was aware of the certification language on the back of her TTD checks and freely signed and deposited the checks. She further testified that she never considered her work at Alaska Herb USA to be employment, as it was purely voluntary, she was never paid, and she was only pursuing a hobby to keep her engaged and positive while she was enduring her disability. Employer alleges Employee is disingenuous, and points to the certification as a fraudulent statement under Devon. Because Employee did not believe her work at the herb store constituted employment, the Board finds she did not make a false statement when signing her TTD checks. However, even if the Board determined that Employee’s signature under the certification constituted a knowing false representation, Employer’s allegation of fraud under .250(b) fails because Employer has not demonstrated that it relied on Employee’s fraudulent statement in issuing further TTD payments. While Ms. Palazzotto testified that she “had no idea” Employee was working at the herb store until it was discovered by the investigator, Employer presented no testimony concerning the receipt of returned checks with Employee’s signature, nor any testimony on how Employer relied on the certification statement in determining whether to continue issuing further payments. Employee never affirmatively stated to Employer that she was not working, other than the certification on the TTD checks. As in Shehata, Employer has failed to show a causal link between Employee’s false statement and the payment of benefits, and thus its fraud allegation fails.
Employer argues that Employee’s failure to disclose her work at the herb store and her sales on eBay to the rehabilitation specialist constitute a false representation upon which Employer relied in providing rehabilitation benefits. However, Employee testified at hearing that she did not feel the eBay sales were relevant, as she was only selling personal property to supplement her reduced income, and the sales were only occasional. Rehabilitation specialist Carol Jacobsen testified that some employees do not disclose activity of this nature because they do not feel it is relevant to their eligibility evaluation or rehabilitation plan. Employee testified that she did not disclose her work at the herb store to rehabilitation specialist Dan LaBrosse because she did not feel it would interfere with her classes and it was only a hobby and purely voluntary. Under Shehata, Employee did not have an affirmative duty disclose her work at the herb store (inasmuch as it relates to .250(b)). Her failure to disclose either her eBay sales or the work at the herb store does not constitute a knowing false representation for purposes of AS 23.30.250(b).
Given the above analysis, Employer failed to prove Employee knowingly made a fraudulent or misleading statement upon which Employer relied in paying benefits, and Employer is therefore not entitled to any reimbursement under this statute. Employer’s petition for a finding of fraud and reimbursement of benefits will be denied.
CONCLUSIONS OF LAW
Employee did not fraudulently obtain benefits under AS 23.30.250(b), and Employer is therefore not entitled to a reimbursement of benefits.
ORDER
Employer’s Petition for a finding of fraud and reimbursement under AS 23.30.250(b) is DENIED.
Dated in Fairbanks, Alaska on August 16, 2010.
ALASKA WORKERS' COMPENSATION BOARD
/s/
Amanda K. Eklund, Designated Chair
Sarah Lefebvre, Member
/s/
Jeff Bizzarro, Member
CONCURRENCE, IN PART, AND DISSENT, IN PART, BY PANEL MEMBER
I concur with the finding and conclusions of my fellow panel members, with the exception of the narrow issue of the Employee’s certification on the back of the TTD checks. I respectfully dissent, and would find Employee misrepresented her work status when she signed each TTD check, and Employer did demonstrate that it relied on that misrepresentation in issuing further benefits. It is implied that in standard business practice an employer is aware of whether checks it issues have been processed, and it was reasonable for Employer to rely on the fact that Employee deposited each check as affirmation on her part that she agreed with the certifying statement and was therefore not working.
/s/____________________________
Sarah Lefebvre, Member
RECONSIDERATION
A party may ask the Board to reconsider this decision by filing a petition for reconsideration under AS 44.62.540 and in accordance with 8 AAC 45.050. The petition requesting reconsideration must be filed with the Board within 15 days after delivery or mailing of this decision.
MODIFICATION
Within one year after the rejection of a claim, or within one year after the last payment of benefits under AS 23.30.180, 23.30.185, 23.30.190, 23.30.200, or 23.30.215, a party may ask the Board to modify this decision under AS 23.30.130 by filing a petition in accordance with 8 AAC 45.150 and 8 AAC 45.050.
EXTRAORDINARY REVIEW
Within 10 days after the date of service of the Board’s decision and order from which review is sought and before the filing of a timely request for reconsideration of the Board decision and order from which review is sought, a party may file a motion for extraordinary review seeking review of an interlocutory or other non-final Board decision or order with the Alaska Workers’ Compensation Appeals Commission under 8 AAC 57.072 and 8 AAC 57.074.
CERTIFICATION
I hereby certify the foregoing is a full, true and correct copy of the Interlocutory Decision and Order in the matter of GAYLE M. CUMMINGS Employee/respondent v. ASRC ENERGY SERVICES INC.,Employer; ARCTIC SLOPE REGIONAL CORP., insurer/petitioners; Case No. 200612715; dated and filed in the office of the Alaska Workers' Compensation Board in Fairbanks, Alaska, on 16th August, 2010.
/s/
Maureen Johnson, Office Assistant II
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[1] Hearing Testimony of Employee, 06/17/10.
[2] Deposition of Employee, dated 09/09/08, at 30-33; Report of Occupational Injury or Illness, dated 08/28/06.
[3] Deposition of Employee, dated 09/09/08, at 34-35.
[4] Id. at 38-40.
[5] Id. at 40.
[6] Medical Report of P.A. Siddall, 8/12/06.
[7] See Medical Reports of Dr. Mannino, 8/06.
[8] Radiology Report, dated 09/12/06,
[9] Medical Report of P.A. Finch, dated 9/12/06.
[10] See record.
[11] See Exhibit A to Employer’s Hearing Brief, dated 06/08/10.
[12] Id.
[13] Hearing Testimony of Employee, 06/17/10.
[14] Hearing Testimony of Employee, 06/17/10.
[15] Radiology Report, dated 0913/06.
[16] North Country Chiropractic & Natural Health Care Chart Notes, dated 10/17/06; Disability Certificate dated 10/19/06.
[17] Return to Work Authorization Form, signed by Dr. Allen, dated 12/5/06.
[18] See Exhibit B to Employer’s Hearing Brief, dated 06/08/10.
[19] EME Report of Dr. Matthisen, dated 01/04/07.
[20] Medical Report of Dr. Slonimsky, dated 2/14/07.
[21] Medical Report of Dr. Onorato, dated 3/13/07.
[22] Medical Report of Dr. Dingeman, dated 3/26/07.
[23] Radiology Reports of Keir Fowler, M.D., dated 4/2/07.
[24] Radiology Reports of Jeffrey Zuckerman, M.D., dated 4/9/07.
[25] Medical Report of Dr. Dingeman, dated 4/10/07.
[26] Medical Report of Dr. Dingeman, dated 4/23/07.
[27] Medical Report of Dr. Dingeman, dated 5/15/07.
[28] Dr. Allen letter to Employer, dated 07/16/07.
[29] Medical Report of Dr. Dingeman, dated 7/24/07.
[30] Medical Report of Dr. Cobden, dated 07/26/07.
[31] Hearing Testimony of Lynn Palazzotto, 06/17/10.
[32] Employee’s Request for Eligibility Evaluation, dated 08/30/07.
[33] Fannie Stoll letter to Employee, dated 10/10/07.
[34] Medical Report of Dr. Dingeman, dated 10/18/07.
[35] Eligibility Evaluation Report, dated 10/27/07.
[36] Faith White letter to Employee, dated 11/16/07.
[37] See Exhibit B to Employer’s Hearing Brief, dated 06/08/10.
[38] Hearing Testimony of Employee, 06/17/10.
[39] Fannie Stoll letter to Dan LaBrosse, dated 12/17/07; Vocational Evaluation, dated 12/28/07; Reemployment Benefits Plan, dated 12/28/07.
[40] Reemployment Benefits Plan, dated 12/28/07.
[41] Job Analysis form, dated 1/10/08.
[42] Report of Dr. Allen, dated 01/31/08.
[43] Reemployment Benefits Plan Status Report, dated 1/31/08.
[44] RBA letter to Dan LaBrosse, dated 02/11/08.
[45] Follow-up EME Report of Dr. Matthisen, dated 02/26/08.
[46] Dr. Matthisen letter to Lynn Palazzotto, dated 3/10/08.
[47] Lynn Palazzotto letter to Dr. Matthisen, dated 3/12/08.
[48] Letter from Dr. Allen, dated 3/17/08.
[49] Dr. Matthisen letter to Tom Hutto, dated 3/18/08.
[50] Reemployment Benefits Plan Status Report, dated 3/27/08.
[51] Physical Capacity Evaluation Report of Forooz Sakata, dated 5/28/08.
[52] Radiology Report of Motion Imaging, dated 5/29/08.
[53] Reemployment Benefits Plan Status Report, dated 7/1/08.
[54] EME Report of Dr. Radecki, 07/09/08.
[55] Employer’s Petition, dated 07/21/08.
[56] Employee’s Opposition to Employer’s 07/21/08 Petition, dated 08/06/08.
[57] Medical Report of Dr. Cobden, dated 08/06/08.
[58] See Prehearing Conference Summary, dated 08/25/08.
[59] Employer’s Answer, dated 08/29/08; Controversion Notice dated 08/29/08.
[60] Deposition of Employee, taken 09/09/08, at 105.
[61] Hearing Testimony of Employee, 06/17/10.
[62] Deposition of Larry Shander, taken 02/09/09, at 12.
[63] Deposition of Dr. Allen, taken 02/09/09, at 20-21.
[64] Id. at 23.
[65] Id., at 63-64.
[66] Id. at 41-42.
[67] Id. at 50.
[68] Id., at 70-74.
[69] Reemployment Benefits Plan Status Report, dated 03/11/09.
[70] EME Report of Dr. Radecki, dated 04/04/09.
[71] See Prehearing Conference Summary, dated 02/09/10.
[72] Hearing Testimony of Dan LaBrosse, 06/17/10.
[73] Hearing Testimony of Dr. Radecki, 06/17/10.
[74] Hearing Testimony of Employee, 06/17/10.
[75] Hearing Testimony of Dr. Radecki, 06/17/10.
[76] Hearing Testimony of Employee, 06/17/10.
[77] US Department of Labor Selected Characteristics of Occupations Defined in the Dictionary of Occupational Titles (SCODDOT).
[78] Hearing Testimony of Carol Jacobson, 6/17/10.
[79] 63 P.3d 272, 277 (Alaska 2003).
[80] 124 P.3d 424, 429 (Alaska 2005).
[81] 225 P.3d 1106, 1115 (Alaska 2010).
[82] Shehata, 225 P.3d at 1115.
[83] Id.
[84] Id. at 1117.
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